Lifestyles of the Tennessee rich

By Felix Salmon

April 17, 2009

It’s commonplace to find families earning more than $250,000 a year in places like New York and San Francisco who don’t consider themselves to be rich. But the WSJ has found solid gold in Ellen and Donald Parnell: they’re earning $260,000 a year in Tennessee and still claim that they “don’t have a load of cash” to cover the things they might want to buy.

The numbers belie their claim, despite the WSJ’s best efforts to paint the Parnell’s plight sympathetically:

For the Parnells, their perception of themselves is based on the math. The value of their house is down $60,000. Ms. Parnell says the couple’s gross income last year was about $260,000. Taxes, premiums for medical care and deductions for Social Security and their 401(k) contributions cut the gross to about $12,000 per month. The family tithes $1,300 a month at their church. Their mortgage, second mortgage and payment on land they bought is nearly $4,000 a month. Other expenses, including their family car payment, insurance and college funds, as well as basics like food, utilities and donations to charities, leave them with about $1,200 left over each month.

Just check out the amount of saving that the Parnells are doing. I’m sure they’re maxing out their 401(k) contributions — that’s $16,500 apiece, this year, or $2,750 a month. If they’re over 50, it’s even higher. They’re making unspecified payments to “insurance and college funds” too, and then they have three different pieces of property on which they are building equity by making mortgage principal repayments.

If you do the math, the Parnells have around $6,700 a month in post-tax spending money. I can’t imagine that the car payment on a decade-old Infiniti is particularly high, and if they want to save or give away a large chunk of that on college funds and charitable donations, that just goes to prove that they’ve got lot of money to play with. If you can afford to give thousands of dollars a month to charity, that’s great — but don’t try to then turn around and plead for sympathy on the grounds that you don’t have much money.

It’s a simple matter of bookkeeping: if you make lots of money, then that money has to go somewhere. You can save it, you can invest it, you can buy houses or land or insurance policies, you can give it away, you can buy necessities, you can buy luxuries. But ultimately, if you add up every single thing, it balances. To then turn around and say “if you add up every single thing, it comes to our entire income” — well, that’s simply tautological, and proves nothing about whether you’re rich or not. And anybody earning over $200,000 a year is rich.

Still, the Parnells are definitely more sympathetic than James Duran, who claims to be “barely getting by” on $400k a year, the poor dear. Maybe he would like some of the Parnells’ charity.